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Documents shed light on murky US-Georgia resource dispute
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Date: None

A London-listed oil and gas company lost a high-profile international arbitration case with Georgia after spending $1m on lobbying fees to pressure the country’s government, openDemocracy and OC Media report today.

The dispute between Houston-based Frontera Resources and Georgia’s state oil and gas corporation dominated the country’s headlines in early 2020, after US politicians attempted to intervene in the standoff over allegations that Georgia was ‘expropriating’ a US business.

Frontera had originally promised to help Georgia acquire “energy independence” and high returns for British investors after it claimed to have found 3.8 trillion cubic metres of gas in the east of the country. But a dispute between the company and Georgia’s state oil and gas corporation over exploration and production territory – including whether Frontera had confirmed viable oil and gas resources – eventually went to arbitration.

Between 2017 and 2020, a number of US Congressmen and Senators sought to pressure Georgia over the Frontera arbitration, drawing on the US’s strategic interests in the country. For the South Caucasus state, US support is vital in defending its interests against Russia, which backs the breakaway territories of Abkhazia and South Ossetia.

Meanwhile, Frontera, which was traded on London’s Alternative Investment Market until it was delisted in 2019, has left former workers unpaid – and shareholders with apparently little recourse to retrieving their investments. Frontera currently owes $240,000 in unpaid wages to former employees in eastern Georgia, and there are believed to be roughly 200-300 shareholders in the UK whose shares have become worthless since the delisting.

The final arbitration decision was made in April 2020, and both sides claimed victory. Under international arbitration rules, little information is publicly available about the details of the case, including which side won – until it was recently released in a legal dispute between two Frontera executives.

[1] Url: https://www.opendemocracy.net/en/odr/documents-shed-light-murky-us-georgia-resource-dispute/